Buy Nazara Technologies Limited for the Target Rs.400 by Choice Institutional Equity Limited
Q3FY26 marks a structural reset for NAZARA, with portfolio clean-up largely complete and earnings quality materially improved. Revenue at INR 4,060 Mn (- 22.9% QoQ / -24.1% YoY) reflects Nodwin de-subsidiarisation and seasonal softness at Fusebox, but core momentum across gaming, publishing and IP-led franchises remains intact. EBITDA margin expanded to 16.8% (+490bps QoQ), driven by portfolio rationalisation, improved UA efficiency, stronger unit economics at Kiddopia and operating leverage, partly offset by elevated Fusebox marketing spends. We expect growth to re-accelerate from Q4FY26, supported by live content resumption, platform extensions (Animal Jam on Roblox), stabilising Sportskeeda and rising international monetisation, underpinning a sustainable Mid twenty percentage revenue CAGR with margins trending toward 20% over the next 2–3 quarters. We raise TP to INR 400 (from INR 390) on SOTP and reiterate BUY, as current valuations underappreciate improving earnings visibility and cash flow durability in a cleaner, platform-led model.
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SEBI Registration no.: INZ 000160131
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